Project Management Institute

Our money's worth

six executive officers recount how project management warranted their investment

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MAKE NO MISTAKE: PROJECT MANAGEMENT MEANS SERIOUS BUSINESS.
It means execution, performance and results. It means top business leaders haven't wasted time transforming their businesses into project-driven environments. From the corner office to the project playing field, the methodology now is a recognized bastion of the enterprise. Here's how some of today's top decision-makers see it.

Jeff Sterba

Chairman, President and CEO, PNM Resources Inc., Albuquerque, N.M., USA

Jeff Sterba started at PNM in 1977 as an intern and after 23 years was appointed chairman, president and CEO. PNM Resources is an energy holding company of 2,300 employees.

We implemented project management methodologies in 2001 to manage enterprise project efforts.

In IT, the impetus for developing a better project management methodology was our human resources and payroll systems replacement project. We developed the project management framework (PMF) to manage low-volume, high-cost projects. The PMF helped create a degree of confidence with our board of directors that we could successfully implement a project of this magnitude.

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With technology upgrades and business process reengineering, there is always risk. Taking on the systems replacement project was a huge challenge. Using our IT PMF, we achieved this typically 12-month project in six months, meeting 96 percent of our measures of success at implementation. PMF tools and processes allowed us to meet our goals on time by eliminating do-over work and controlling last-minute changes.

Our system design process has allowed the company to reallocate 23,570 labor hours for our electric operations and 6,409 hours for gas operations, reducing the need for external resources.

We've also created a construction management process. So when PNM faced a critical deadline installing a 20-mile gas line, our construction management process allowed the crews to complete it in eight months. With coordinating right-of-way, environmental, material and contractor schedules, this project previously would have taken two years.

Now, we have trained more than 1,400 employees in project management skills, and these cross-functional team members help ensure success in all of our project management initiatives, saving us valuable resources and improving our productivity.

Randolph L. Howard

President, Unocal Thailand Ltd., Bangkok, Thailand

Randolph L. Howard joined Unocal in 1973 and was appointed president of Unocal Thailand in 1999. Unocal is a global independent natural gas and crude oil exploration and production company with about 6,600 employees. Unocal Thailand is the largest gas producer in Thailand.

Unocal Corporation has always placed a high emphasis on being a leading project development company, which means meeting cost, time and quality targets. Our culture is one of continuous improvement, and we have numerous processes that audit and benchmark our performance.

In 1996, Unocal Thailand recognized a large number of critical projects were about to start simultaneously. This was a catalyst to audit and benchmark our performance, and we consequently recognized a need for a solid project management platform and standardized systems. This became a key change management challenge because the system had to be scalable for projects ranging from thousands to hundreds of millions of dollars.

We developed and piloted our project management initiative and built a network to migrate this knowledge around the company. The network has sponsors at the vice president level, and every business unit has network members. Some of our larger business units even have a full-time project coaching staff that supports project managers on a one-to-one basis.

Now we have a greater ability to “front-end load” our projects, enabling better and more scalable project planning, execution and control.

In fact, our North Pailin Gas Development Project was a finalist for the 2003 PMI Project of the Year Award. Project management was fundamental to this success. The project produced its first gas 37 days ahead of contract delivery schedule and 12 percent under budget. The team faced significant economic challenges along the way that make these achievements even more remarkable.

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In effect, we have improved our capital spending project performance and are delivering greater shareholder value. In many areas of the world, we are also being approached as prospective partners based on our ability to deliver high-quality, low-cost, innovative development solutions. Project management has played a major role in establishing this reputation.

Tony Salvaggio

President, Computer Aid Inc., Allentown, Pa., USA

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PHOTO OF TONY SALVAGGIO BY ED WHEELER

Tony Salvaggio cofounded Computer Aid in 1982. Computer Aid is a professional systems development and support firm with 1,700 employees. In 2003, Salvaggio received the Central/Eastern Pennsylvania Ernst & Young Technology and Communications-Information Technology Entrepreneur of the Year award.

To me, everything is a project. Whether it's in software or we're putting in a new human resources process, everything's a project. We're pretty fanatical in the concept of project management, from having a truly well-defined scope to understanding the critical success factors of a project. We have a comprehensive methodology for project management that starts with the idea or vision and provides templates and structure for all phases of the project. It is meant to be consistent and still easy to use and represent best practices.

It was my observation from previous experiences that often projects are not managed with consistency and rigor. When we started the business in 1982, I saw that we could have a dramatic competitive advantage if we implemented advanced project management for all our activities. It keeps us from making monstrous mistakes and also keeps us from making the same mistakes repeatedly. It allows us to be better, that is, faster, quicker, at a lower cost and at lower risk.

It's behind the whole idea of how we manage our business. Our business itself is a series of many discrete projects. Additionally, we're very process driven. When we have a new initiative, we have standard checklists that must be filled out, and at certain levels, we actually enforce paper- and computer-driven systems that define behaviors. Additionally, we use our project management structure to capture knowledge and drive our learning and training models.

We've grown from two people to 1,700 people in 21 years. That never would have happened without project management.

Bill Davis

Vice President, Eastern Business Unit,

xwave, St. John's, Newfoundland, Canada

Bill Davis is responsible for xwave's business in Atlantic Canada, New England and Ireland. xwave, a subsidiary of Aliant, is an IT services firm with 2,300 employees.

xwave was incorporated in 1999 from a number of founding companies—all with different backgrounds and methods of executing projects. In seeking consistency in its methodologies and best practices, xwave developed a formal, rigorous project management practice known as xWay. As one of Canada's largest IT services companies, project management is vital to the success of every project xwave delivers to its energy, telecommunications and public sector clients.

xWay is a comprehensive library of client-focused and internal methods and best practices. The process-driven approach helps determine a project management strategy and related key activities based on the size and risk of a project. It covers virtually every stage of the consulting process including project management, issue management, risk management and resource management, and is based on a wealth of experience gained from serving numerous clients in a broad range of industries.

With the growing complexity of IT infrastructures required to run and support business applications, strict controls and measures are needed to minimize risk and ensure a project is delivered on time and within budget. Project management helps xwave manage key baselines, and it helps introduce consistency as project managers work across teams and manage a wide variety of projects in various geographies.

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One of the more significant projects xwave managed was for Aliant Telecom, which has its roots in four Atlantic telecommunications firms: NewTel Communications, NBTel, Island Tel, and Maritime Telegraph and Telephone. Long before the 1999 merger that brought them together under the Aliant banner, these companies decided to leverage the strength of their regional alliance and join forces to assess, update and synchronize their individual administrative systems.

Consider the logistics of bringing together the assets, people and processes—not to mention the information systems—of four telecommunications companies. We staggered the implementation over two years and included three modules: financials, supply chain management and human resources management systems. xwave developed a project management strategy to support the project work and ensure quality deliverables that fit the client's needs.

xwave's management of the project resulted in a solution that improved general record-keeping at Aliant. Before the new system, they didn't have the space or resources to maintain accurate employee files or resources to maintain files of past employees. Since the implementation, xwave has added modules and new releases and has created greater functionality of its IT systems.

Charles J.O. Wodehouse

President, CSX Technology, Jacksonville, Fla., USA

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Charles Wodehouse joined a CSX predecessor company in 1979 as assistant to the vice president and comptroller. He has served as president of CSX Technology since 1998.

We made our commitment to project management in 1997 when CSX Transportation and its chief competitor entered into a highly unusual agreement resulting in the joint acquisition and division of a third railroad's assets. The price tag was approximately $11 billion.

CSX Technology coordinated the concurrent cutover that connected key computer systems of all three companies and provided a platform for phased conversion of the third railroad's systems to those of CSX and its competitor. All this was to happen while the three railroads continued to operate uninterrupted.

Project management offices (PMOs) were implemented for the IT teams at each company to ensure a high level of coordination. The number of discrete projects managed by CSX Technology's PMO soared to more than 200. Timelines to complete the implementation—driven by the federal government—were tight, and all tasks had to be executed flawlessly to meet milestone dates.

Quite frankly, CSX Technology's credibility in delivering large IT projects wasn't very good before we adopted formal project management. But the bigger projects are where we want to invest—they're the ones with the greatest potential value. Project management was a key to unlocking this potential.

CSX Technology uses project management because it works. We don't know a better way to guarantee delivery of IT products on time and on budget with the promised functionality. Project management isn't just a process to get from point A to point B; it is a tool that ensures we get the expected benefits. CSX Technology uses project management because it is a proven strategy and a part of our core ideology.

With our recent Onboard Wireless project, project management allowed us to not only control the cost and progress of our own project, but also to compare ours against those built within other companies.

The project involved coordination over multiple organizations within CSX that have teams across the entire eastern half of the United States. We brought together various global vendors that had never worked together and products that had never been integrated. We had to account for the time needed to certify the new products to work into our integrated effort. We were implementing very new technology to our field forces, so there was a considerable human element to consider. We were required to provide “just in time” training to get the benefits of the product's delivery. Shortly after the individual was trained, we put them in front of a new piece of hardware with a new software application. This type of implementation can be accomplished only with a total organizational commitment to project management.

Martin C. Clague

President and CEO, Covansys, Farmington Hills, Mich., USA

Martin C. Clague was promoted to president and CEO of Covansys in 2002. Covansys is a global consulting and technology services company that specializes in industry-specific solutions, strategic outsourcing and integration services.

Project management has been a core discipline at Covansys since we founded our company in 1985. As we grew, the size and scope of the projects also grew, and our project management capabilities became more robust and sophisticated.

This sophistication was invaluable when we first opened our facilities in India in 1992 and established our development centers in Ohio, California and Michigan. We suddenly needed to effectively manage projects across multiple time zones. Last year, our offshore facilities in India achieved a Level 5 rating for the Software Engineering Institute's (SEI) People Capability Maturity Model (PCMM). This was the second such distinction for Covansys. We never would have been able to achieve these industrywide distinctions without project management.

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For Covansys, project management isn't a new trend; it is a business imperative. That's why we recently implemented a project management office to work with our global project managers to improve their individual skills and our overall project management maturity. As a result, we believe Covansys now has more PMP certified project managers than any other offshore vendor.

In addition, Covansys uses project management because we are results-oriented. Our experience has shown us repeatedly that an effectively managed project leads to positive results. Project management processes assist our managers in developing a road-map to achieve specific results and help them measure their progress. That roadmap assists the project team in focusing on the end results and the means to achieve them. Having a well-defined roadmap is particularly critical when you deal with projects that have onsite, offsite and offshore components. Well-defined objectives and milestones help ensure that every member of a virtual team is working together to meet a predetermined result.

Project management also leads to employees who enjoy their work. The bottom line is that successful project managers create winning teams—and everyone wants to be part of a winning team. In the end, this corresponds to increased profits and repeat business.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK | JANUARY 2004 | WWW.PMI.ORG
JANUARY 2004 | PM NETWORK

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